Foxconn has list of requirements for investing in iPhone, iPad production in Brazil

Apple manufacturer Foxconn reportedly has a list of requirements to be met by the Brazilian government before the company agrees to invest $12 billion in facilities that could eventually produce the iPad and iPhone in Brazil.

Brazilian newspaper Folha de São Paulo reported recently that Taiwanese manufacturer Foxconn has communicated a list of needs to government officials, as noted by Forbes.

According to the report, the list includes:
1. Large property to house more than one division of Foxconn.
2. High speed wi-fi.
3. Export priority shipping at São Paulo (and other unnamed) airports.
4. Financial support from the Brazilian National Development Bank, BNDES.
5. Government help in finding minority investors.
6. Transportation and logistics that permit quick delivery of goods to and from Foxconn facilities.
7. Office wired 100% with fiber optic cables.
In response, Brazilian president Dilma Rousseff has reportedly outlined her own requests for Foxconn. Rousseff asked that Foxconn hire "primarily Brazilian labor, transfer of technology and the basic respect for Brazilian labor rights and laws," the report noted, adding that Foxconn CEO Terry Gou publicly criticized Brazil's labor laws late last year.

Foxconn has seen its own share of criticism. Last year, a rash of suicides at the company's Shenzhen plant prompted investigations into whether the company was running a "sweatshop." Foxconn denied the allegations and claimed it would "stabilize the situation soon."

The Brazilian government has given itself an 8 month to two year time frame to meet the requests in hopes of enticing Foxconn and Apple to begin production in Brazil, according to the report. Foxconn already has facilities in São Paulo that produce hardware for Sony and Dell.

Earlier this year, Rousseff acknowledged that the Brazilian government is reviewing Foxconn's plans for a $12 billion investment in new facilities by the company. Brazil's science and technology minister also confirmed that Foxconn plans to begin building iPads at existing facilities in Brazil by November. Foxconn has yet to confirm its plans for such an investment in the country.

Due to hefty import taxes, Apple's products in Brazil cost up to three to four times U.S. prices. As such, a Foxconn plant in the country could greatly reduce costs for Brazilian consumers. It remains unclear, however, what tax structure would be imposed on Foxconn if it were to begin producing iPads in Brazil.

Last year, reports emerged that Brazilian entrepreneur Eike Batista, who is the eighth richest man in the world, was interested in bringing Apple to a new $1.6 billion development he is building at the Port of Acu.

According to the report, the list includes:
1. Large property to house more than one division of Foxconn.
2. High speed wi-fi.
3. Export priority shipping at São Paulo (and other unnamed) airports.
4. Financial support from the Brazilian National Development Bank, BNDES.
5. Government help in finding minority investors.
6. Transportation and logistics that permit quick delivery of goods to and from Foxconn facilities.
7. Office wired 100% with fiber optic cables.

8. All employees must sign a contract stating they won't commit suicide.
9. All employees must have protective netting installed under their dormitory windows, just in case they decide to violate said contracts.
10. All employees must work 60 hours per week + 16 hours legally allowed overtime + 12 voluntary "bonus" hours every time Apple releases a new product and 4 months thereafter.
11. All employees must be genetically bred to withstand exposure to harmful chemicals without proper protective equipment.

At 4, seeking financial support from the country's own bank is poor form. Foxconn should do their numbers based on an unsubsidised investment. Apple have sometimes put their hand out for subsidies too but governments need to resist it.

There is no mention of a subsidy for the NC data center. In fact, just the opposite, Apple had to guarantee to spend at least $1 billion over 10 years. They requested a tax break for it in return, but thats not a subsidy.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

There is no mention of a subsidy for the NC data center. In fact, just the opposite, Apple had to guarantee to spend at least $1 billion over 10 years. They requested a tax break for it in return, but thats not a subsidy.

That makes your argument into anyone or any company that has ever received anything that could be defined as a tax break as now being subsidized the government. That line or reasoning doesnt jive with me.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

We all afforded them when they were build in the countries like the US and Ireland. We've come along way from when Apple wasn't allowed to build Macs in China because they were too powerful and the US government wouldn't allow it.

Further, when Apple was building in the western world was at the height of the economic boom. When companies like Apple shipped the bulk of its manufacturing overseas to countries that utilize slave labor is when the economy tanked.

At 4, seeking financial support from the country's own bank is poor form. Foxconn should do their numbers based on an unsubsidised investment. Apple have sometimes put their hand out for subsidies too but governments need to resist it.

$12 billion is a lot of cash. even apple will try to find low cost financing instead of writing a check

8. All employees must sign a contract stating they won't commit suicide.
9. All employees must have protective netting installed under their dormitory windows, just in case they decide to violate said contracts.
10. All employees must work 60 hours per week + 16 hours legally allowed overtime + 12 voluntary "bonus" hours every time Apple releases a new product and 4 months thereafter.
11. All employees must be genetically bred to withstand exposure to harmful chemicals without proper protective equipment.

Quote:

Originally Posted by ranReloaded

...
12. No macumba on the facilities.
13. No dancing samba on the facilities.
14. No playing soccer in the facilities.
15. Not committing suicide if your soccer team looses the tournament.

Since many of the components and much of the manufacturing is automated, estimates are that a "Made in the USA" iPhone would add only about $50 to the cost, something Apple could easily absorb from its ample profit margins and justify as a good will measure and a counter to claims that it's growing rich by exploiting overworked teenagers from poor villages in China. Don't forget that Asian auto companies have made out quite well manufacturing here. Detroit may have become a terrible place to make cars, but there's no problem with American workers in general.

The real issue lies the snobbery of our coastal elites. Obama's "bitter and clinging to guns and religion" remarks made during his election campaign were addressed to a closed crowd of such people. That's also why iPhones say "Designed by Apple in California. Assembled in China" rather than "Designed in the USA. Assembled in China," much less "Designed and Assembled in the USA." Apple's executives still live in the 1970s, when California meant cool. Today, it's perhaps the worst run state in our nation's history, with huge budget deficits, collapsing infrastructure, and a dismal school system. You'd think Apple would be embarrassed to be in the middle of such a mess.

I find it both amusing and revealing that Apple, so enlightened and progressive, feels it must work out a deal with Brazil, with its 18th-century mercantilist import/export policies. In particular, it seems eager to reward Brazil for those heavy import duties on iPads by building factories there to export to the rest of Latin American. Are they really so short-sighted they don't realize other countries might adopt similar policies toward Apple products, hoping to reap similar rewards?

--Michael W. Perry, Chesterton on War and Peace: Battling the Ideas and Movements that Led to Nazism and World War II

Since many of the components and much of the manufacturing is automated, estimates are that a "Made in the USA" iPhone would add only about $50 to the cost, something Apple could easily absorb from its ample profit margins and justify as a good will measure and a counter to claims that it's growing rich by exploiting overworked teenagers from poor villages in China. Don't forget that Asian auto companies have made out quite well manufacturing here. Detroit may have become a terrible place to make cars, but there's no problem with American workers in general.

The real issue lies the snobbery of our coastal elites. Obama's "bitter and clinging to guns and religion" remarks made during his election campaign were addressed to a closed crowd of such people. That's also why iPhones say "Designed by Apple in California. Assembled in China" rather than "Designed in the USA. Assembled in China," much less "Designed and Assembled in the USA." Apple's executives still live in the 1970s, when California meant cool. Today, it's perhaps the worst run state in our nation's history, with huge budget deficits, collapsing infrastructure, and a dismal school system. You'd think Apple would be embarrassed to be in the middle of such a mess.

I find it both amusing and revealing that Apple, so enlightened and progressive, feels it must work out a deal with Brazil, with its 18th-century mercantilist import/export policies. In particular, it seems eager to reward Brazil for those heavy import duties on iPads by building factories there to export to the rest of Latin American. Are they really so short-sighted they don't realize other countries might adopt similar policies toward Apple products, hoping to reap similar rewards?

--Michael W. Perry, Chesterton on War and Peace: Battling the Ideas and Movements that Led to Nazism and World War II

I know it doesn't support your scattershot rant, but it is Foxconn, not Apple, considering building the factory.

With regard to California, it occurs to me that Apple and California have several things in common.
Both seem to be relatively expensive.
Both have detractors who badmouth them with peculiar and disturbing vehemence.
Apple has about 10% of the computer market, while California has about 10% of the US population.
When people experience both, they are often surprised at how wrong the hateful stereotypes are.
People are streaming across the borders from all directions to experience both.
Where else would Apple be located?

Since many of the components and much of the manufacturing is automated, estimates are that a "Made in the USA" iPhone would add only about $50 to the cost, something Apple could easily absorb from its ample profit margins and justify as a good will measure and a counter to claims that it's growing rich by exploiting overworked teenagers from poor villages in China.

Since many of the components and much of the manufacturing is automated,....... blah blah.......
--Michael W. Perry, Chesterton on War and Peace: Battling the Ideas and Movements that Led to Nazism and World War II

Quote:

Originally Posted by quinney

I know it doesn't support your scattershot rant, but it is Foxconn, not Apple, considering building the factory.

Ouch.

Tim Cook is gay, believes in climate change, and cares deeply about racial equality. Deal with it (and please spare us if you can't).

Since many of the components and much of the manufacturing is automated, estimates are that a "Made in the USA" iPhone would add only about $50 to the cost, something Apple could easily absorb from its ample profit margins and justify as a good will measure and a counter to claims that it's growing rich by exploiting overworked teenagers from poor villages in China. Don't forget that Asian auto companies have made out quite well manufacturing here. Detroit may have become a terrible place to make cars, but there's no problem with American workers in general.

I spent about 30 years in US manufacturing primarily moving jobs out of the US. Do you think operations in China have extensively staffed Human Resources departments, with a host of consultants for all sorts of nonsense to make our pampered workers happy? Do you think operations in China have a well staffed legal group and tons of outside counsel that is constantly defending the company from frivolous lawsuits, many brought by employees? Do you think Chinese management is constantly distracted by a legion of consultants (excuse me, friends of the Chairman) pitching strategic planning, profit improvement programs, JIT programs, Quality Number One programs, Best Practices, EEOC compliance, Personal Achievement Goals, personnel tracking, grading and advancement programs, layers of people spread out throughout the organization dealing with government compliance issues, not to mention a Tax department, complete with outside counsel and consultants to deal with a labyrinthine tax code, if public, SEC compliance, investor relations, analyst dog and pony shows and monthly changes in direction to deal with earnings management? Do you think Chinese firms spend about 9 months each year developing, reviewing, adjusting, again reviewing annual and strategic plans, along with help from more friends of the Chairman? Do you believe Chinese manufacturing management is resource constrained because the cash flow their operations generate are used to fund "strategic" acquisitions (80% of which are losers)? And lets not forget devoting time to PAC's, United Way and free consulting to even more friends of the Chairman who happen to be at other companies. Finally there's labor; whether protected by a union or a Human Resources Department they can remember all the details of last weekends sports games, what's coming up this weekend, all sorts of trivia they can talk about all day long, surfing on the web for hours a day, each and every word of their employment/labor contracts or human resources directives but can't seem to ever learn how to assemble a product the same way twice. How easy do you believe it is to hire decent process people, metallurgical engineers, or foremen with college degrees in the US? To train employees on complex programmable machine tools when to modernize a production line would set off a series of labor contract issues, bumping determined by seniority instead of capability, and months, if not years, dealing with unions to implement anything constructive -- only to end up with something so diluted from it's original intent that you shelve the plans? That's assuming you can even get the capital to invest.

I've moved plants to Germany, France, Italy, Switzerland and the Far East. With the exception of the Far East, at higher unit labor costs. All with improved productivity and profitability.

US manufacturing management learned a long time ago how to escape the mess that has become the norm at the Corporate, Group and Division levels. They put what counts out of the reach of all the nonsense.

Yes, you might add $50 in labor cost, but you will add multiples of that in overhead.

I spent about 30 years in US manufacturing primarily moving jobs out of the US. Do you think operations in China have extensively staffed Human Resources departments, with a host of consultants for all sorts of nonsense to make our pampered workers happy? Do you think operations in China have a well staffed legal group and tons of outside counsel that is constantly defending the company from frivolous lawsuits, many brought by employees? Do you think Chinese management is constantly distracted by a legion of consultants (excuse me, friends of the Chairman) pitching strategic planning, profit improvement programs, JIT programs, Quality Number One programs, Best Practices, EEOC compliance, Personal Achievement Goals, personnel tracking, grading and advancement programs, layers of people spread out throughout the organization dealing with government compliance issues, not to mention a Tax department, complete with outside counsel and consultants to deal with a labyrinthine tax code, if public, SEC compliance, investor relations, analyst dog and pony shows and monthly changes in direction to deal with earnings management? Do you think Chinese firms spend about 9 months each year developing, reviewing, adjusting, again reviewing annual and strategic plans, along with help from more friends of the Chairman? Do you believe Chinese manufacturing management is resource constrained because the cash flow their operations generate are used to fund "strategic" acquisitions (80% of which are losers)? And lets not forget devoting time to PAC's, United Way and free consulting to even more friends of the Chairman who happen to be at other companies. Finally there's labor; whether protected by a union or a Human Resources Department they can remember all the details of last weekends sports games, what's coming up this weekend, all sorts of trivia they can talk about all day long, surfing on the web for hours a day, each and every word of their employment/labor contracts or human resources directives but can't seem to ever learn how to assemble a product the same way twice. How easy do you believe it is to hire decent process people, metallurgical engineers, or foremen with college degrees in the US? To train employees on complex programmable machine tools when to modernize a production line would set off a series of labor contract issues, bumping determined by seniority instead of capability, and months, if not years, dealing with unions to implement anything constructive -- only to end up with something so diluted from it's original intent that you shelve the plans? That's assuming you can even get the capital to invest.

I've moved plants to Germany, France, Italy, Switzerland and the Far East. With the exception of the Far East, at higher unit labor costs. All with improved productivity and profitability.

US manufacturing management learned a long time ago how to escape the mess that has become the norm at the Corporate, Group and Division levels. They put what counts out of the reach of all the nonsense.

Yes, you might add $50 in labor cost, but you will add multiples of that in overhead.

Wow.

I had to paste the whole thing in my reply, because everyone should read this post at least twice.

Tim Cook is gay, believes in climate change, and cares deeply about racial equality. Deal with it (and please spare us if you can't).